The Princes Highway was proclaimed State Highway No. 1 by the newly elected Main Roads Board in 1928; however, it had existed as a major route for some time previously. Eight years earlier, on 19 October 1920, the Princes Highway was named “Prince’s Highway”, in honour of the visiting Prince of Wales. The naming took place at a ceremony at the top of Bulli Pass, which, at the time, was so steep that the cars transporting the official party could not make the climb and the official party had to walk to the top. In 1941 the possessive form of the name was dropped, the highway becoming simply the “Princes Highway”, as it is known today. The official gazetted definition of the Princes Highway had originall ended at Cleveland Street, at the boundary of the City of Sydney. Following the extension of the Department of Main Roads' responsibilities into the City of Sydney the highway was extended on 4 December 1964.

The formation of the Main Roads Board in 1925 meant the beginning of a major reconstruction effort for the Princes Highway. This was the first time coordinated roadworks were undertaken on this road – the previous works were usually of local nature, serving local needs, or the construction of bridges by the Department of Public Works. The progressive reconstruction of the highway was planned to span a large number of years, working south from Broadway towards the Victorian Border.

The highway through Newtown and St Peters was widened to four lanes – albeit with a tramline running down the middle – between May 1927 and November 1929. Following a long campaign by local councils and motoring authorities, a State Government loan to Sutherland Shire Council was used to finance the replacement of one the ferry services across the Georges River. The location chosen was Tom Uglys Point – on the Princes Highway – and construction of the bridge commenced in February 1925. The bridge was opened on 11 May 1929, by which time the bitumen seal on the highway had been extended as far south as Waterfall and a new bridge had been constructed across the rail line at Yallah. In December 1932 the bitumen reached Bulli Pass, completing the bituminous sealing from Sydney to Kiama.

In May 1931 a major highway deviation was opened to traffic between Albion Park Rail and Shellharbour (Dunmore) Railway Station. This new alignment, locally known as the ‘telegraph line road’, superceded the former route via Albion Park, Oak Flats and Shellharbour (now sections of Illawarra Hwy, Tongarra Rd, Pioneer Dr, Wattle Rd and Shellharbour Rd). The old route was rather indirect, a remnant from the days when most long-distance travel was done by either sea or rail. The other commonly used route between Albion Park Rail and Kiama was via Jamberoo.

Unemployment relief work was undertaken along the highway during the 1930s. A lookout was constructed at Mt Pleasant in 1935, high on the clifftops between Kiama and Gerringong. A 2.3km deviation between Omega and Gerringong Railway Stations during 1936-1938 bypassed two railway crossings along the old route of Fern St and Belinda St. In 1936 a 1.7km deviation was constructed through steep country near Broughton Creek, between Gerringong and Berry. During 1933 a deviation on the north side of Ulladulla replaced the meandering highway route through Mollymook. The major project during this time was the 16km deviation across the Cockwhy Range, providing not only a dustless surface but also a vastly improved horizontal and vertical alignment. This deviation took eight years to construct, opening to traffic in December 1939. Further south, bridges over the Wagonga River at Narooma (June 1931), the Brogo River near Bega (December 1936), and a deviation at Palwambra Mountain between Mogo and Moruya (1932) were all completed during the Depression.

The reconstruction of the Princes Highway was halted in 1941 due to the onset of war in the pacific, with funds and manpower being transferred to major defence routes. It was during 1942 that Mount Ousley Road was constructed as an alternative to the steep and narrow Bulli Pass for the larger defence vehicles to descend the Illawarra Escarpment.

Following the war, reconstruction work continued south from Batemans Bay. Construction of a steel truss opening bridge across the Clyde River was commenced in December 1946, however, a post-war shortage of steel caused long construction delays – the bridge was not completed until November 1956. Also constructed during the 1940s was the Brogo Pass, north of Bega, eliminating one of the worst sections of steep and winding road in the state. By 1950 the bitumen seal reached Moruya, where the bridge across the Moruya River had been washed away in the April 1945 floods. A temporary timber bridge was constructed across the river until a permanent concrete structure could be built – opening to traffic in December 1966.

On 31 May 1952 the tolls were removed from Tom Ugly’s Bridge across the Georges River, while down south a new bridge across the Tuross River at Bodalla was opened in March 1957. A major deviation southward from Narooma was opened to traffic in August 1956, providing a much-improved alignment on the east side of Corunna Lake. In 1954 the highway was honoured with inclusion in the National Route system as part of National Route 1. Signage was erected along the length of the highway during June 1955.

The 1960s brought the completion of the reconstruction and sealing plan that had been started in 1925. The first project to be completed this decade was a deviation from North Bega to Allsopps Creek in March 1960. This was followed by a new 6-lane concrete bridge across the Cooks River at Tempe in May 1962. New bridges were also opened across the Clyde River at Batemans Bay (21 November 1965), Minnamurra River at North Kiama (April 1965), Nullica River south of Eden (November 1966) and across the Moruya River at Moruya (December 1966). The bitumen finally reached the Victorian Border in 1965, and the completion of the 40-year project was celebrated with the opening of a new bridge across the Towamba River at Kiah in March 1965. The 1960s were rounded off with the opening of a highway deviation at Engadine in Sydney’s south. The new route, which parallels the railway line on the west side, bypassed the existing highway through the centre of Engadine. The Engadine Deviation was opened to traffic in December 1969.

With sealing nearly completed, attention turned to providing bypasses around the busiest sections of highway, as well as upgrading poorly aligned sections that were no longer adequate for modern traffic. The first bypass on the highway had opened in July 1963 – a single carriageway route from North Wollongong to Phillips Ave at West Wollongong. This bypass road is part of the F6 – Southern Freeway, which parallels the Princes Highway and has subsequently taken the National Route 1 shield. The National Route 1 shield first left the highway in July 1975, when the Waterfall-Bulli Tops Tollwork opened to traffic. NR1 took a new path between Waterfall and Kembla Grange via the Waterfall-Bulli Tops Tollwork, Mount Ousley Rd, the Southern Freeway and Northcliffe Drive. NR1 was also routed onto further sections of the freeway as they were opened in traffic. The bypassed sections of the Princes Hwy were at first given the Alternative National Route 1 shield, however, towards the late 1980s this designation was gradually replaced by the State Route 60 shield, which it carries to this day.

In September 1972 a deviation was completed between Boydtown Creek and Kiah, 8 to 13km south of Eden. Several important projects were opened to traffic during 1975. The 2km Sutherland Bypass was opened to traffic in September, utilising an existing local road – Acacia Road – and a short section of the proposed F6 alignment. At Brownsville, in southern Wollongong, a new bridge and 3.4km of approaches were constructed at Mullet Creek to replace a winding and flood-prone alignment. Further south, a new high-level 623m long bridge across the Bega River at Bega was opened to traffic in August 1975. The bridge and its approaches form Stage 1 of the proposed Bega Bypass to the west of town. In conjunction with the Waterfall-Bulli Tops Tollwork, 8km of dual carriageways were constructed between Heathcote and Waterfall, as well as a grade-separated interchange at Kooraban St in Waterfall.

Bypassing of town centres continued during the 1980s with a number of deviations opening to traffic. First of all, a new three-lane bridge to carry northbound traffic was constructed across the Shoalhaven River at Nowra, with the existing steel truss bridge – opened in 1881 – to carry two lanes of southbound traffic. The new bridge connected to the new 4 and 6-lane highway route through Nowra – the East Street Deviation – on the south side. The bridge was opened to traffic in September 1980, followed exactly a year later by the East Street Deviation, which utilised a widened East Street to bypass the centre of Nowra.

Further south, a short deviation was constructed at Batemans Bay to take the highway around the west side of the town centre. The new highway route utilised Vesper Street by constructing a link between Vesper St and Orient St. The deviation was opened to traffic in October 1981, eliminating a 90 degree turn at the southern approach to the Clyde River bridge and removing local-through traffic conflict from the town centre. In December 1982 a new concrete bridge was opened across the Merimbula Lake, replacing a timber bridge that had been in use since February 1929.

In December 1983 construction was commenced on the Kiama Bypass, south of Wollongong. Costing $27 million (1987), the bypass was constructed through steep terrain and involved large cuttings, large fills and some steep grades, yet still provided vastly improved travelling conditions with dual carriageways. To compliment the project, the dual carriageway conditions were extended southward to the Mount Pleasant Lookout. The Kiama Bypass was opened to traffic on 14 December 1987. In November 1990 the widening of the highway to four lanes between Yallah and Oak Flats was completed. This widening involved two new bridges across the rail line at Yallah, a new bridge across Macquarie Rivulet (duplicating the bridge constructed in 1971) and the construction of a roundabout at the Illawarra Highway intersection.

At Merimbula, construction of a 7km bypass – which would shorten the highway route by 5km – was undertaken in three stages, the first of which opened in 1988. The bypass passes to the west of Merimbula Lake between Milligandi and Pambula, removing highway traffic from the coastal resort town. Stage 2 opened in February 1991 and the bypass was completed in January 1992. The high standard travelling conditions were continued northward in December 1993 when reconstruction between Wolumla and Yellow Pinch was completed.

On 17 October 1987 a new bridge across the Georges River to carry southbound traffic was opened to traffic, duplicating the existing three-lane bridge that had been in use since 1929. At the northernmost end of the highway, plans were announced in April 1986 for a $12 million route to link the Princes Hwy at St Peters with Darling Harbour, Sydney Harbour Bridge and the Glebe Island Arterial (Anzac Bridge). The new route would make use of mainly one-way streets through Redfern, bypassing the congested highway through Newtown. Construction was commenced in April 1987, and improvements to the route were completed in June 1993, however, its importance was greatly reduced with the opening of the Sydney Harbour Tunnel and the realignment of NR1 onto Southern Cross Drive in August 1992.

In August 1990 the 3km Tilba Bypass was opened to traffic, bypassing one of the worst sections of the Princes Highway through steep and rocky terrain. Further improvement was undertaken in this area, with a deviation at McLeod Hill opened to traffic in February 1996.

A major change of alignment was made on 1 July 1993, when the Princes Highway was regazetted to follow the Northern Distributor and Bellmbi Lane, bypassing Corrimal. Signage on the road has not reflected this change, however, as the old highway - now a local road - still bears the Princes Hwy name on signs.

During the 1990s new construction work was focused at the northern end of the highway, particularly in extending the dual carriageway conditions southward. In 1993 Environmental Impact Statements were released for both the Oak Flats to Dunmore Upgrade and the North Kiama Bypass, while dual carriageways were completed through Bomaderry in December 1993. The Tomerong Bypass, south of Nowra, was opened to traffic in July 1995 and a deviation at Myrtle Gully near Conjola was completed in August 1997.

Construction was commenced in February 2001 on the 7.6km North Kiama Bypass which will provide freeway conditions between the north end of the Kiama Bypass and the Swamp Road interchange at Dunmore. The bypass was first mooted in 1986 when the Department of Main Roads decided not to proceed with the widening of the existing highway following an EIS. In 1990 an extension route study was undertaken, followed by an EIS in 1991 and another updated one in 1996. The bypass was finally given planning approval in July 1997. The project also involves widening the highway through Dunmore to the southern limit of the Oak Flats-Dunmore Upgrade, the first stage of which - Oak Flats Interchange - was opened to traffic on 19 October 2001. The Oak Flats-Dunmore Upgrade has been postponed due to a lack of funding, while an amended design for North Kiama Bypass in the Bombo area resulted in a delay of approximately 6 months. The original completion date was expected to be June 2005 but the bypass was not officially opened until 26 November 2005.

Also, another two grade-separated interchanges were constructed on the highway: at Helensburgh (December 2000) and Haywards Bay (August 2003), the latter being funded by the developers of a new housing estate at Haywards Bay.

Unusually, the Princes Highway is now split in half. On 15 October 2002 the section of former highway from Waterfall to Bulli Tops was decommissioned and regazetted as Main Road No. 678. However, the Southern Freeway was not redeclared as the Princes Highway and thus a 26km gap now exists in State Highway No. 1.

Future construction touted for the highway includes the Oak Flats-Dumore Upgrade (no timeframe given), duplication between Nowra and the Jervis Bay turnoff ($15 million under Auslink, no funding from NSW Government as yet) and a new bridge over the Pambula River ($5 million under Auslink, no funding from NSW Government yet) to replace the existing flood-prone bridge and approaches. The latter project is also being considered in conjunction with a future bypass of Pambula township.